A series of working papers from the OECD Local Economic and Employment Development (LEED) Programme. The LEED Programme identifies, analyses and disseminates innovative ideas for local development, governance and the social economy.
Governments work with the LEED Programme to generate innovative guidance on policies to support employment creation and economic development through locally based initiatives.

Eastern Germany is well on its way to becoming a modern economy and developing its high growth potential. Start-ups and young businesses have become key contributors to the region’s growth due to their dynamism and their capacity to renew the local knowledge base. In the context of a global economic crisis, we need to reflect upon the role of start-ups and their capacity to contribute to local economic development. Over the last years, the entrepreneurship activity gap between western and eastern Germany has been significantly reduced, leading to almost equal levels in both parts of the country. The total business start-up rate in Germany, amongst the age group 18 to 64 years, was 1.7 percent in 2007. The entrepreneurial potential however, especially amongst the highly qualified, is far from being exhausted.